On Wall Street, bonus time comes a little before fine season, usually. Fines — for improper practices and fraud by financial corporations — are exacted mostly by three federal agencies (the SEC, FINRA, and CFTC) and a huge host of state agencies. For the biggest banks and stock trading firms, this happens throughout the year, EVERY year.

Here are some of the biggest fines Wall Street firms and the Big Banks have had to pay in recent years:

1. $722 million, JPMorgan Chase — For its role in the 2009 wreckage of a sewer refinancing attempted in Jefferson County, Alabama, JPMorgan was fined this amount by the SEC. The bank allegedly paid bribes to county officials in order to get the refinancing contract with the county. The deal was fraught with derivatives as part of the loan. Jefferson County is now bankrupt, sewer rates for residents have skyrocketed, and they are in endless debt.

There were more municipalities to file for bankruptcy that year too, for very similar reasons, in multiple states.

2. $550 million, Goldman Sachs — This fine was demanded of Goldman Sachs in July 2010 (but was still pending, as of March 2011) by the SEC, who sued the Wall Street firm for fraud related to only one mortgage security.
Abacus 2007-AC1 was the name of that security. The Abacus deal involved John Paulson, famous hedge fund manager who has probably made more than anyone else in shorting funds. Goldman Sachs failed to disclose to investors — who were going long on the deal — that Mr. Paulson was involved in choosing the components of that bundle of mortgages… and that he was also betting against it.

3. $515 million, Bank of America — Fined in 2004 for permitting improper rapid trading of mutual funds in its Nations Fund. At least half was for investor restitution.

4. $285 million, Citigroup — In December 2011, Citigroup was fined this lordly sum relating to a CDO containing toxic subprime mortgages. It is still in question, as U.S. District Court Judge Jed Rakoff didn’t like it, since they are not required to admit to any guilt for the sales.

5. $280 million, JPMorgan Chase — In June 2011, JPMorgan Chase paid this huge fine for its “Squared CDO-2007” deal, which resembled the “Abacus” of Goldman Sachs. Just like Goldman, JPMorgan had failed to let investors know that another party betting against the fund had helped make it.

6. $215 million, Citigroup — Way back in 2002 Citigroup paid $215 mil to settle a case brought by the FTC claiming that part of their company, The Associates (later CitiFinancial) deceived customers to get them to refinance at interest rates amounting to usury.

7. $137 million, Bank of America — This may be one of the most egregious cases, with a sadly inadequate fine, of all the fraud, collusion and predatory practices seen in the Big Banks and stock firms during the last few years. It was found in 2010 that a conspiracy to rig bids on municipal bonds contracts had been carried out among the biggest banks. JPMorgan Chase, UBS, Wachovia, and others were implicated along with Bank of America. They took turns being “awarded” contracts in dozens of local bonds derivatives contracts.

The SEC demanded for its fine only $36 million; but another $101 million was added to the penalty by multiple state and federal agencies. It is estimated to have cost taxpayers over $1 billion.

……. As huge as these amounts seem, they are tiny in relation to the sums earned by the respective companies. For instance, what JPMorgan CHase paid for the Squared fines was less than 2 days’ income that quarter. In 2006, Citigroup grossed $38 billion from subprime home loans…. wait for it…. and their net profit that year was $28 billion.

Wall Street banks and the SEC officials pretending to regulate them may as well have had the colostomy bags ripped off them, shoved in their faces and told, “explain this!” — airport style. That’s the thought

The SEC, it seems, has been destroying the documents of a case anytime the matter or complaint does not become a full investigation. Called out on it, now they are trying to deny and cover up that they’ve been doing it.

Taibbi’s revelations are amazing since much of them relate to whistleblower Darcy Flynn, who still cannot speak to the press. Flynn is an SEC attorney who was appointed to oversee documents which, he discovered, are regularly destroyed at the SEC as soon as the case relating to them isn’t upgraded to a full investigation. The destruction of such preliminary documents happens to be illegal, but it had become standard procedure. Senator Charles Grassley is currently trying to get answers about it from them.

Preliminary investigations over the last few years, include such familiars as: Goldman Sachs, Bernie Madoff, JPMorgan, Lehman Brothers, AIG, Deutsche Bank. Most of whom received government bailout funds.

And just why did those in particular not get investigated, when as we know, criminal activity was definitely taking place then, and resulted in the “cratering” (Taibbi’s favorite verb) of the economy just a little later? That of course can be answered with a picture of a revolving door, with SEC top people leaving and going straight to their new, very-well-paying jobs at JPMorgan or another bank, while the just-resigned head of said bank goes to his new job at the SEC. A few years later they or other individuals at same banks trade places. The relationship between the SEC and the Big Banks is that of friends, mentors, and future employers.

It’s not just the evils of who in particular got elected last. It’s a deeply-rooted weed in our government which has been growing for almost 2 decades, the era of the too-big-to-fail Big Banks.

Wall Street bonuses are now bonuses not only on Wall Street, but in many of the largest corporations. DisneyWorld and Toyota topped the list of corporations revealed to have been given the H1N1 vaccine by the CDC and permitted to distribute it without having to account to anyone how they gave it out. The CDC did not tie their hands in any way to ensure it was given first to the high-risk groups like children, the elderly and pregnant women.

Information confirming this has been released by several states.

So, as I said, our country is made up of corporations which are recognized by the government as legitimate entities which apparently will keep the public safe, and keep the public in order. I suppose next we’ll hear that Disney World and Toyota and Time Inc. all have heavily armed security forces, miniature armies. Or maybe they just use Blackwater/Xe or CACI. If food distribution ever had to take place, the megacorporations will take over that task.

A flu shot makes a nice exclusive perk that the rest of the population can’t just walk in and buy. A nice corporate bonus, which Goldman Sachs (pig!) has already given to its top execs.

So sick of Wall Street and its bonuses today, sick of Goldman Sachs (pig!), sick of AIG’s yacht-loving executive, and Ted Geithner and Larry Summers and Bernanke! Very sick of them. Instead, I’m thinking about socialism today. I avoided putting it in one word so you wouldn’t choke; I know how Americans don’t like saying or hearing the word. It’s as if you all lived during the 50s.

I’m thinking, not a full system of socialism but just some good practices which are generally or vaguely socialistic. So everyone can just relax.

To segue to a discussion of them, against my first instinct I will quote Ilargi of theAutomaticEarth. Ilargi, hidden man of the financial industry, is a doomsayer. He scares me, sometimes, with his proclamations: that living in the suburbs is a trap, that everyone should buy gold, that the world’s going to end, yadda and yadda. He is a smart guy but doesn’t seem to understand the American governing method of making things palatable for the public, of preserving appearances. Utter economic destruction is unpopular, so if only for that reason the government will do things to avoid a lot of it. It won’t do it well, but it’ll do it. Therefore his Armageddon world will not really arrive. Nevertheless I find important quotes in his writings that are worth remembering and are even of use buttressing oneself against despair. This, for example:

“…the stock market is not the real economy. And neither is it representative of that economy, in fact it’s probably less so now than at any point in the recent past. And it can turn in a second and on a dime.”

I’ve said before that stocks, which rise and fall influenced largely by reports (and rumors) from the issuing companies, are not a measure of the economy the ordinary person lives in. The megacorporations have changed their very accounting equation, faking their numbers, and their manipulation of their supposed assets and losses is being tolerated by the federal government.

If “the stock market is not the real economy” right now, we may have some power over our own economic futures after all. Obviously the financial sector is not who would read this blog, so you, sitting across the screen from me, are probably one of the middle class. That same middle class Elizabeth Warren says is caught in a vise. We — we are closer to the underpinnings of the economy than Wall Street is. We consist of the workers, the small businessmen, the professionals, and so on. If the stock market isn’t an accurate picture of anything in our lives, I wonder if we can’t start creating our own economy, distinct and separate.

It would take a lot of humanity and patience, and a lot of people. A lot of people acting cooperatively. Here are some actions we’d need to take:

1. Searching for new green industry — and more important, small greener practices — to invest in, buy, or start up. Small green spots are what I have in mind, really; individuals beginning in ones or twos to start buying a thing which is renewing… or renewable. Like using red worms and compost for your lawn instead of a chemical-based lawn service. Chemicals mean big corporation, usually; red worms mean small farmer. Go on from there, and go bigger, finding more green practices and industries.

2. Formation of tiny groups to support one another in other ways, especially when it comes to financial ventures. We need Kiva lending here! In colonial America, some religious and ethnic groups formed their own trade groups; groups which trusted their members if only because they were of the same faith or background. I used to hear, on the radio, ads for a Christian group that provided a sort of health insurance for each other just by paying one another’s medical bills. I’ve no idea how it worked out, and suspect it was a big scam but if it wasn’t it may also have tanked due to being unreasonable. However, it suggested the vast power there could be in joining a like-minded group. But today we see betrayal of that sort of grouping in the Bernie Madoffs, Ted Haggards, etc., etc. If we are subject to the social phenomenon known as the Big Sort, we can also change the way in which we sort ourselves. And it is not really a “sorting” if outsiders are welcome to join the contract. Example: food co-ops. You can buy here if you do some work here. And credit unions, that’s another example. We’ll give you a loan because you’ve kept your money here for a certain period of time, and you pay your bills on time too.

3. Patch Adams-types of solutions for health care. Greater equality among participants in every aspect of the health care system. (It is, actually, proper to call it a “system,” since it is a natural part of our lives.) The Gesundheit Institute and its friends have done mountains of work on this and other subjects.

4. Purchasing a real item of value instead of buying stock. De-sophisticating the economy. If the banks too big to fail are getting bigger; if the financial houses are again engaging in the same risky practices that brought down the economy; if the government is not regulating the banks and financial industry enough, then all stocks are a much, much bigger gamble than they appear. It’s enough to make you want to buy not just precious metals, but timberland acreage and other things that ordinary people actually need. Trucks, tools, building material, livestock, even large appliances for heating and cooling. Since most of these things can’t be squirreled away like savings, you’d have to use them, rent them out, or sell them. Each of which involves difficulty, but at least you have control over the process. Successfully sell or rent your assets, and you’ve become a business…

Small businesses may be the best things for the (real) economy. They tend to use extra money to buy new equipment and even new people: employees. They are the big consumers and the big job creators, not Wall Street and not the government. The smaller they are, the less likely they are to be speculating on Wall Street with their cash. Small is good.

While I’m climbing Dream Mountain, I imagine masses of people moving their money out of the stock market and putting it to work themselves. Not putting their faith in big corporations (which have acted without good faith). With the exodus of lots of investors, the stock market would shrink. Making the whole “economy” much more real, easier to participate in. Making it sturdier. Making it stronger.

Okay, I don’t have the background to analyze what the result would be to a growth-dependent economy, but the stock market lived and breathed for decades well below the frantic trading levels we see today. It could do so again.

No, I can’t replace people’s 401Ks and IRAs with anything yet, not quickly. Slow-growth investments like bonds can’t cut it yet, maybe, not by themselves. But if you do your own stock-picking for your financials, you should keep in mind what just happened in our economy and everyone seems to want to forget. The financial industry destroyed a great deal of what you’d been saving for years. They did it for themselves. And they are working themselves back to that position again, saying we need that old bonus system and huge executive compensation so they can keep the same sort of “creativity” on Wall Street. You know — “creative,” like financial derivatives are “creative” products. Oh, they’re creative all right. And magic too. They made millions of houses vanish.

No, that’s incorrect — the houses are still there. (Missing some copper wiring and pipes, though.) Their magic trick was to turn millions of homeowners into street people. Abra-Cadabra. Poof!

Rather than putting all your eggs in that same rotten basket you could set some aside, let them take their chance in the world and become chickens. Not all of us are good at raising chickens but you could try, and join a group of chicken-raisers or something. It’s a risk. It’s always a risk.

………….. Boy, I almost let that mention of Goldman Sachs (pig!) in the first paragraph go without putting the word pig beside it.

The recent Wall Street bonuses that Goldman Sachs, CIT, JPMorgan et al gave their top employees were from a syringe. They got vaccinations against the dreaded new H1N1 flu. Excuse me, but this means that now every time I write the name “Goldman Sachs” a pig will appear. Please excuse the delay while I conjure that pig up. ***

Okay… And I solemnly swear that each time Goldman Sachs (oops, pig!) is mentioned by me that I will bring in the pig. This is the pig we own, the pig we are supporting.

Each of the major bailout corporations were given — by the CDC?!! — a supply of vaccine from around 200 to 1200 doses. Citigroup got the 1200.

I didn’t realize the too-big-to-fail banks’ staff consisted entirely of babies and pregnant women. Or are they all just over 80 or something?

Time Inc. and Sloan-Kettering in NYC also got the vaccine; I never knew that Time Magazine was a health care facility. Next time I get sick, maybe I should go there. And cough hard.

Are corporations a division of the community or something, that the CDC consults with to communicate with the general public, is this why they have distributed medicine to them? Are they part of the government? I have to think for a minute what I am a citizen of. Wait. Does the branching go: Nation… state….county…municipality/town…citizen — or is it: Nation…corporation…region….department…office cubicle…citizenworker?

Sorry for all the questions. I still have to learn to stop asking stuff. And I have to quit makin’ stuff up, while I’m at it.

Morgan Stanley said they were giving their whole supply (1000 doses) to area hospitals. Is there any confirmation, I wonder? You know how much we believe them these days. Believe, believe, believe.

So this is how it is now: Wall Street gets the lifesaving vaccines, gets the billions of dollars’ bailout. I read that Canada gave the vaccine to a hockey team, the Calgary Flames, AND their families, the day before local clinics had to stop giving it out to the at-risk groups because they ran out. I’m not sure how much more palatable this is. Hockey teams in Canada are the equivalent of Brad & Angelina, George Clooney, Miley Cyrus. All of whom probably already got the vaccination. Which is logical, on the government’s part because: Movie and TV celebrities are the people who keep us going to movies, watching TV, keep us buying consumer goods, all of which keeps us medicated materially and keeps us from doing other things, like changing our government dramatically.

I wonder if J.K. Rowling, the Englishwoman richer than Queen Elizabeth, has had the vaccine yet.

It’s a shame. These corporations have put us in the position of actually wishing their top staff would get sick. It’s not likely to happen; the Goldman Sachs (pig!) executives probably already received their shots, and vaccinations are pretty effective.

I never, ever thought we’d be here. Goldman (pig!), CITI, JPMorgan, AIG, and the Fannie siblings act openly giving these outrageous bonuses, unwarranted super-special health consideration the public does not get; they do everything so unabashedly! If we had the plague, all the bankers and brokers would simply leave the cities and go to their estates in green Florence, sing, and tell one hundred stories while we died! Do you realize that?

Does anyone wonder how brokers do on organ transplant lists?

We have been unable to persuade our swollen, dropsical Congress to do things like break up the banks, or add the regulation that should be there. Our president is asleep and dreaming, like Chthulhu in his house at R’lyeh. And pigs — I tell you — are flying.

Bonuses on Wall Street are yet again in the headlines. And Two things just appeared in the news about Goldman Sachs:

1. They’re predicting an enormous profit this year, surpassing the last good year anyone else had, namely 2007; and the bonuses they plan to pay break records, as I’ve mentioned in an earlier post. The entire recession, it appears, was a market adjustment which cleared out the bulk of their competition. The recession was great for them. They’ve also been permitted to repay their TARP loan. I’d like to know why Obama lets Treasury permit this.

I really want to know.

2. Goldman had a break-in, and called the Justice Department about it. An employee who had just departed for a better job with another company, Sergey Aleynikov stole some ultra-secret software from Goldman Sachs that “could be used to manipulate markets.”

So somebody with talent hates Goldman. And did something about it. He uploaded the program to an encrypted, shared server. This immediately calls to mind the newsgroups, and all the old beta testers of Microsoft software who leaked copies of everything out to the public. Why do they do it? Because they don’t like the company. It’s their version of rebellion, and it’s the most effective kind around.

I secretly — sweatily — swarthily tip my hat to this guy. We are already convinced that Goldman has been manipulating the markets for many years, and caused incalculable harm. A recently dispossessed person, someone who’s lost his or her job or home or both — looking at this issue from a stance in the financial gutter — may feel perhaps it’s only just if the rest of the world got to use this software. But of course, now it’s been removed.

Note: Sergey Aleynikov may have accomplished the theft using an ultradog, since Russians are known for owning them. Here is a picture of Putin’s ultradog, an amazing animal.

Supersized Wall Street bonuses are planned by Goldman Sachs to be paid soon to their top executives and traders, bonuses exceeding last year’s and the year before. The moment I read about it, I

Once again we may see stovepipe hats on Wall Street.

thought this decision was going to be undone by the provisions restricting TARP companies — since GS has not paid back the $10 billion it owes the U.S. But Goldman is NOT grouped among those handful of companies that received “extreme assistance” on whom these restrictions lie. How handy!

No, they only received $10 billion, that’s all, and were laxly permitted to receive the complete value ($12.9 billion) of their credit default swaps from AIG — thus sending AIG into broke status — and special treatment at every step it has taken in recent years. GS is NOT being investigated for misrepresenting its financial status to its shareholders, although documents have emerged suggesting this very thing. Some would say those documents demonstrate it, not suggest it.

So Goldman can go ahead and pay those bonuses, nothing much stopping them.

And now (according to Bloomberg.com) one of the biggest Wall Street trade groups, the Securities Industry and Financial Markets Association (SIFMA), is going on the road with a niceness campaign to try to convince the public in some of the big cities that Wall Street doesn’t really suck.

They hired former assistants of Henry Paulson in this campaign. Are they really hoping, let alone expecting, to change the minds of the general public?

But …we know that the security industries suck. How can we blind ourselves to the fact that they suck? Because they actually suck.

A nice parade might work, for five minutes anyway. This level of distrust is difficult to sustain and it would be a nice break. After all, I already have to divert myself from grim reality with cartoons of honest sheriffs and other righteous inventions. For instance, I went to read Wigu.com to look at Sheriff Pony.

****************************************

(Cut to: Diversion from Bleak Financial Reality.)

Sheriff Pony looks like the offspring of Quickdraw McGraw and Smurfette, when maybe Quickdraw had to go to France during the war. The Smurfs are French, in case you didn’t know.

Quickdraw McGraw's Baby Mama?

I bet all the major elves are related.

The tribe of Smurfs, I’d guess, are foreign cousins of the Keebler elves, who everyone knows are ardent capitalists — almost as bad as the Ferengi. Both the Smurfs and the Keeblers practice magic. You know the song: “And they’re baked in magic ovens and there’s no fac-tory. Hey!”

I know what you’re about to ask…. What’s their connection with the Rice Krispie elves? Well, they’re the first cousins of the head Keebler elf, who entertains a rather low opinion of them. The Rice Krispie brothers, Snap, Crackle, and Pop, were sort of drifter artists who at last found work in the cereal industry to keep themselves from starving in the gutter. The Keeblers, by contrast, are very bourgeousie and successful. They love their magic ovens. They’re so smug.

Yeah, they’ve got work and they do not need to rub it in.

All of a sudden I’m feeling sympathetic towards the Rice Krispie guys. And all these people lately, who are out of jobs.

Mike Morgan, Wall Street blogger and reportedly a registered investment advisor (whatever that means, exactly), is being sued by Goldman Sachs for running his blog site, www.Goldmansachs666.com. Goldman Sachs may simply want the domain name, but are filing a cease-and-desist order against him. Morgan’s blog is extremely critical and sometimes accusative of Goldman Sachs. While his website isn’t that great, needlessly repeating a lot of text, and posting headlines that don’t quite follow through, it does contain a whole lot of information that just adds to our dislike of GS.

He quotes a recent article, from an economic site, which seems to assert that Goldman Sachs executives lied to Congress about the amount of bonuses it paid. Interesting that GS isn’t suing the author of that article, as far as we know.

Remember the oil price surge which all of a sudden reversed as if it were a bad dream? (So long ago, it seems.) It drove us all crazy; all sorts of people claimed that speculators were to blame, manipulating the stock market, and then others claimed that speculators couldn’t be doing it. Well, it certainly seems like manipulation was there, for sure. And if some of it was done by GS… we’d like to know, since they practically run the US Treasury.

It seems, from the Forbes article, that J Aron & Co., which is Goldman Sachs’ commodities trading arm, did lots of trades with Semgroup — who had bet that the price of oil would go down. But of course the price kept climbing, somehow. (No one really has a good explanation for that, do they?) Semgroup faced suddenly a margin call for amounts it couldn’t pay, and tried to get J Aron to pay them for oil that Aron had purchased from them. J Aron refused, and wanted its margin call right away. So Semgroup had to file for bankruptcy. And right afterwards… the price of oil broke and began its remarkable plunge.

It’s looking like a duck, and sounding like a duck, and walking like a duck, and…